Bitcoin surged to a fresh all-time high, marking its highest point in over two years. However, the OG token quickly followed suit, taking a nosedive shortly after.
The cryptocurrency's price soared past $69,210 on Tuesday morning, breaking the previous record set in 2021 before retracting swiftly. Despite the initial excitement, the prices of orange coins dipped by 6% by the end of the day. It seems there were no eager buyers willing to continue bidding above the daunting price tag.
Bitcoin price has skyrocketed by over 50% in the past month, leading to celebrations among many Bitcoin holders whose wealth has substantially increased. However, historical trends suggest they should brace themselves for potential fluctuations.
The recent surge in price has been fueled by investors hungry for returns, who poured billions into purchasing Bitcoins, buoyed by the introduction of new Bitcoin investment vehicles. In early January, US regulators approved 11 spot Bitcoin ETFs after 11 years of anticipation and legal battles. Since their launch, over $7.5 billion has been invested in these popular ETFs. Additionally, the upcoming April "halving" event has contributed to the current uptrend.
Despite Tuesday's immediate correction, the new record marks a significant milestone for an industry that faced reputational and regulatory challenges just two years ago. In 2022, the crypto industry endured substantial setbacks, with bankruptcies of crypto lenders and the collapse of crypto exchange FTX. The US Securities and Exchange Commission's skepticism toward crypto has led to numerous legal actions against companies allegedly engaging in illegal activities.
Bitcoin hit a two-year low at the end of 2022 amidst concerns about the FTX contagion, experiencing a 64% drop in value that year. Since then, it has been striving to establish its legitimacy.
The recent record-breaking surge could also signify a resurgence of retail investors entering the crypto market. Led by Bitcoin, the crypto market made a remarkable recovery in 2023, surging by 157%. Initially triggered by a regional banking crisis in the US, the digital asset also benefited from speculation surrounding the potential approval of ETFs tracking bitcoin prices by the US Securities and Exchange Commission.